The Waller Group is proud to present the 81.1% occupied, 212-unit value-add portfolio in Tucson, AZ. The portfolio consists of two properties: 1) Sixth Ave Suites and 2) Spanish Trail Suites.
The 30 recently rebuilt units at Spanish Trail Suites have a waiting list in-place with tenants waiting to move-in. These units have been individually metered and once transformers are installed/inspected tenants will move in starting February 1 and be fully leased around mid-February. Spanish Trail Suites is expected to be delivered to buyer at 95.0%+ occupancy, equating to a 93.0%+ portfolio occupancy.
Current ownership is achieving $870,594 in annual NOI. Once the 30 units are filled, the rental income on March 10 will be approximately $133,802, which equates to a T-1 annualized NOI of around $1,103,196 for an estimated 5.48% delivered cap rate.
New ownership, based upon area rent comps, can raise rents by $163 / unit, which is a $0.47 / sqft bump. With this bump, new ownership can achieve an annual NOI of $1,593,184. Additionally, there is the opportunity to implement additional income fees through implementing a ratio utility billing system for the 182 units that aren’t individually metered, late fees, application fees, pet fees/deposits, MTM fees, and parking fees. Another cost saving opportunity would be utilizing water conservation opportunities such as updates on faucets, showers, and low flow toilets, which can save up to 20% on water bills.
Current ownership has completed numerous renovations at the 2 properties. 1) Sixth Ave Suites: completely renovated the interior units, sealed/inspected the roof 2 years ago, and replaced 40 PTAC units over the last 2 years, 2) Spanish Trail Suites: completely rebuilt one building (30 units) in 2021, and upgraded the chiller tower, lines, and valves.
The property is available because current ownership is looking to reinvest proceeds. The property is currently self-managed. New ownership will have to find management. Current and proforma financials were underwritten with a 5.0% management fee.